Which taxes each business form pays in Uruguay

Heads up: this post is about taxes (the ones the DGI charges), not social-security contributions (BPS). The legal form you choose changes which taxes you pay and how. First the taxes that exist, then which ones apply to each form — with the official quote and link beside each.

The taxes that exist (DGI)

VAT (IVA) is the consumption tax: you charge it on sales and deduct it on purchases. The standard rate is 22% and it reaches almost every activity. Very small businesses (Literal E) instead pay a fixed IVA Mínimo.

«El Impuesto al Valor Agregado (IVA) es un impuesto que grava la circulación interna de bienes, la prestación de servicios dentro del territorio nacional, la introducción de bienes al país.»

In English: Value Added Tax (VAT) is a tax on the internal circulation of goods, the provision of services within the national territory, and the introduction of goods into the country.

IRAE taxes business profit, at a general rate of 25%. It's the typical income tax for companies.

«La tasa del impuesto será del 25% (veinticinco por ciento) sobre la renta neta fiscal.»

In English: The tax rate shall be 25% (twenty-five percent) on net fiscal income.

IRPF is the personal income tax: it covers work (services) and capital (for example, rent). It's the typical path for someone providing personal services on their own.

«El Impuesto a las Rentas de las Personas Físicas (IRPF) es un impuesto anual que grava las rentas puras de capital o puras de trabajo de fuente uruguaya.»

In English: The Personal Income Tax (IRPF) is an annual tax on pure capital income or pure labour income of Uruguayan source.

The Wealth Tax taxes what you hold (net worth) at year-end. Capital companies pay it at 1.5%; individuals only if they exceed a tax-free minimum.

«El Impuesto al Patrimonio (IP) es un impuesto anual que grava la tenencia del patrimonio neto dentro del territorio nacional al 31 de diciembre en caso de personas físicas o a fin de ejercicio para personas jurídicas.»

In English: The Wealth Tax (IP) is an annual tax on the holding of net worth within the national territory as of December 31 for individuals, or at year-end for legal entities.

What each form pays

Companies (SA, SRL, SAS and others) pay IRAE on their profit (25%), VAT on their sales (22%) and the Wealth Tax (1.5%). In addition, corporations (SA) pay ICOSA, a fixed control tax.

«Los principales impuestos directos aplicados en el Uruguay a las empresas son el Impuesto a la Rentas por Actividades Económicas (IRAE), a una tasa del 25%.»

In English: The main direct taxes applied in Uruguay to companies are the Tax on Income from Economic Activities (IRAE), at a rate of 25%.

If you work as a sole proprietor (unipersonal) or de facto partnership, it depends on your size and activity. There are three typical paths:

1) Small Business (Literal E): if your yearly billing stays under the cap, you don't pay IRAE or regular VAT; you pay a fixed monthly IVA Mínimo instead.

2) Personal services (professionals or trades): as a rule you pay IRPF, but you may opt to pay IRAE if it suits you.

«Quienes obtengan rentas por servicios personales fuera de la relación de dependencia podrán optar por tributar el IRPF o el IRAE.»

In English: Those who earn income from personal services outside an employment relationship may choose to pay IRPF or IRAE.

If your income from those services is high, IRAE stops being optional and becomes mandatory: the threshold is UI 4,000,000 per year.

«Deberán tributar preceptivamente el IRAE quienes obtengan rentas comprendidas en el IRPF por servicios personales prestados fuera de la relación de dependencia, cuando tales rentas superen los UI 4000000.»

In English: Those earning income covered by IRPF for personal services rendered outside an employment relationship must pay IRAE on a mandatory basis when such income exceeds UI 4,000,000.

Table: which taxes each form pays

And monotributo? It's a separate regime for very small activities: a single fee that replaces these national taxes (and goes together with the BPS contribution). It's not an extra tax in itself.

In short: companies (SA, SRL, SAS) pay IRAE, VAT and Wealth Tax. The sole proprietorship depends: if small, Literal E; if personal services, IRPF (with the option of IRAE); if commercial and larger, IRAE. For your case, talk to an accountant — and always verify with the DGI. Tributo builds your calendar with the amounts and sources.